Robots Are Replacing Humans at All These Wall Street Firms

The world’s biggest money manager on Tuesday announced that it would cut more than 40 jobs, replacing some of its human portfolio managers with artificially intelligent, computerized stock-trading algorithms.

The layoffs due to automation are an industry-wide shift. By 2025, financial institutions will reduce their human workforce by 10%—resulting in roughly 230,000 fewer heads—as computers take their place, the financial services consultancy Opimas estimates in a recent report. Of those displaced jobs, 40% are expected to come from the money management space.

BlackRock (blk) and Wall Street’s motivation for the changes is clear: Replacing humans with artificial intelligence will lower their ratio of costs to profits by 28%, according to Opimas.

Even celebrity stock-pickers who made their name making the right call at the right time are turning to AI for consistent returns.

After cutting 15% of his workforce in mid-2016, veteran hedge fund manager Paul Tudor Jones introduced computer-driven tools that would imitate trades by the firm’s best managers, according to Bloomberg. Jones is also incorporating machine-learning technology in an effort to expand the firm’s computerized trading capabilities.

Even the family office of legendary trader Steven Cohen, Point72 Asset Management has been trying to use computer algorithms to find what exactly made his most profitable trades work so well, in the hopes of replicating that success, according to Bloomberg.

Yet while AI is becoming increasingly trendy for all types of hedge funds, Cohen and Dalio are later to adopt the technology than some other tech-savvy investors. Quant firms including Two Sigma and Renaissance Technologies have been using artificial intelligence to automate some of their trading operations for years, and are using computers to glean new insights into the market.